The most telling comment on the publication this week of the Government-sponsored Higgs code on corporate governance comes from the distinguished industrialist Sir Nigel Rudd, head of boardroom issues at the Confederation of British Industry (CBI): “This could lead to multiple splits in the board, which every man and his wife could come along and exploit.”
Rudd was referring to the proposal in the review, chaired by former investment banker Derek Higgs, that the role of senior nonexecutive directors should be strengthened to represent shareholders’ views more actively. He may or may not have a point, but what really attracted my attention was that rather quaint phrase “every man and his wife”.
Now, I’m no relic of the Seventies’ Women’s Lib movement, nor a great subscriber to its bastard-daughter, the liberal political correctness fad of the late Eighties and early-Nineties. People used to tell me that they had managed to get another woman onto their board as if they were some kind of endangered species and they were doing something special for the environment. Like planting a tree. These were, anyway, invariably the boards of “soft” design or PR companies – a sort of commercial ghetto for women.
And I might add that I know that Rudd was just using a figure of speech. At least, I think I know that. Perhaps he was trying for “the world and his wife”, the first recorded use of which I trace to the 18th-century author of belles lettres, Christopher Anstey.
Or maybe Rudd just wanted to say “every man and woman”. That would have been harmlessly, even invisibly, descriptive. But he didn’t say that. What he said was that boardroom splits might be exploited by male shareholders and their spouses.
That reveals a worrying view of the world. What Rudd appears to be saying is that men, who naturally run things such as shareholder registers, might cynically exploit a well-meant initiative in corporate governance – and, horror, their wives might join in too.
As it happens, he is right. Not necessarily in his view on the Higgs report, but in his doubtless unwitting observation that shareholder power is still overwhelmingly in the hands of men.
We have had some notable and somewhat too high-profile women in institutional fund management – Carol Galley and Nicola Horlick are two names that come to mind – but the City and retail shareholders are still predominantly male (though share-dealing over the internet has gone some way to redressing the balance in the market for the latter).
I’m in favour of a quiet and progressive redressing of the gender balance, rather than a kind of Ab-Fab positive discrimination in favour of women, whatever their professional quality. I dare say Rudd is too. But my point is not just the obvious one – that careless phrases from people in influential professional positions, such as Rudd’s, reinforce old-fashioned prejudices (true though that is).
It is that Rudd’s casually careless comment reveals how stuck in the past is the thinking of institutions such as the CBI. One is forced to wonder what its attitudinal approach is to “boardroom issues” other than those of gender.
Rudd is a distinguished chairman of glass-manufacturer Pilkington and among his other interests are non-executive directorships at Barclays and Boots, so we should presume that he knows what he is talking about. My concern is that he may be talking about the kind of industry he grew up in, rather than the one we want in the future.
Meanwhile, the Higgs report concludes that there is no “magic circle” of non-execs, in which backs are mutually scratched and remuneration committees see each others’ members right. This assertion is backed by research for the Financial Times from Metapraxis, which demonstrated that just 95 of the 2,800 directors in the FTSE’s 350 top companies held two or more board posts.
I’d like to see the details of pluralised directorships in the FTSE 100. Anecdotal evidence seems to suggest that among the UK’s leading, listed industrial companies not a few names crop up discomfitingly often. It would be invidious to single out any names, but look for yourself.
Needless to say, they are all men. And, needless to say, they are all men who have lent their names to corporate governance reviews over the years, from the Cadbury Report in 1992, to Greenbury in 1995 and Hampel in 1998. And, in 2003, we have Derek Higgs’ contribution.
By now, I wish we might have had the Scardino Report or the Furse Committee on corporate governance. Not, in keeping with my earlier comments, because there needs to be positive discrimination in favour of Marjorie Scardino of Pearson or Clara Furse of the London Stock Exchange – both of whom are quite capable of looking after themselves – but because the boys’ corporate-governance clubs patently have not worked.
From Maxwell to Enron, corporate fraud has been executed in a testosterone-fuelled environment, while corporate governance has been examined against the background of self-rewarding non-execs in a pass-the-cigars-please atmosphere.
That’s why I would like to see more women take a front seat in corporate governance. Business should not be conducted like the war that men are about to lead us into. And its governance needs a fresh approach.
I’m less interested these days in what men like Rudd think about corporate governance. I’d rather hear, with respect, what his wife thinks.
George Pitcher is a partner at communications management consultancy Luther Pendragon